Yes, I have had one of my applications rejected because of too many CRAA enquiries. (Westpac). But it was approved (x2 more) when I explained them.

Terryw
Discover Home Loans
North Sydney
[email protected]

Here I am.

Terryw
Discover Home Loans
North Sydney
[email protected]

And what about when those ‘minors’ become ‘majors’ and maybe going to uni and not earning any money = good beneficiaries.

You can also distribute approx $650 each year to minors without them paying tax. It helps if you have lots of kids!

Terryw
Discover Home Loans
North Sydney
[email protected]

Trust Magic is the only one you need.

Terryw
Discover Home Loans
North Sydney
[email protected]

Marc

I think you have confused yourself somewhere. No credit cards are needed, just you borrow a portion of the growth to use for living expenses. Keeping it low allows for periods of low growth. It is nothing like selling your real estate and then renting it back, but the opposite. Where as you wuld otherwise has to sell, you instead keep the property and just access a percentage of the growth. That way you get to keep the property and then acess to future growth. I know somebody who is doing this with only one property – he is just taking some money supplementing his income between jobs.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Dolly

Lenders don’t really like taking into account incomes from pensions.

Depending on the locations of the properties, you may be able to get an asset loan at 65% LVR – no income declaration required. eg using your partners cash, you could probably buy something around the $360,000 mark – leaving your loan as it is. Intrest rates are higher for these loans – around 7.5%pa.

Terryw
Discover Home Loans
North Sydney
[email protected]

Bardon

I think it is better than that. You borrow money to buy the income producing units in a unit trust, so all interest is claimable against your personal income. As the trust is not paying any interest, it makes a large profit which can then be distributed at the trustees discretion. I am not sure if there is any requirement to distribute all or just some or none to the unit holder (aferall, if they were not making money from the units, they may not be able to claim the interest).

Terryw
Discover Home Loans
North Sydney
[email protected]

To learn more about setting up trusts, go to http://www.lawcentral.com.au and register, then go thru the process of designing your own discretionary trust (all for free). If you actually go to the end and pay $275 you will get your trust deed on the spot – via a PDF file. Print it out and take it to the office of state revenue and pay your stamp duty – $0 in QLD, $200 in NSW, and that’s it.

But because there are different types of trusts and different stategies, going and getting some advice may be better in the first instance. It can cost from $1000 to about $2000 to setup a trust thru an accountant.

Tranfering existing properties will incurr stamp duty and require new loans to be taken out as Acey said, but you will also have to pay CGT as it is considered a sale. It may be better leaving as is, and buying all future property in a trust.

But it still may be worth looking at as you could release ‘profits’ which could be used to pay down non deductible debt and then reborrowed again for investments.

find a good accountant.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi High

It is a good strategy. If you have say, 10 properties, you could increase the LOC on one property per year, so in year 11, you go back to IP one and do again – they would have hopefully more than doubled in this time.

Just don’t go taking too much. Maybe 80% of any growth would do. eg IP valued at $300,000 grew at 10% last year = $30,000 so just take 80% of this = $24,000.

But getting loans without an income is not as easy as you suggest. It would have to be an asset lend which are usually 65% LVR, or you could use a Low Doc at 80% LVR declaring an income, both = higher rates. You wuold probably need multiple banks as they would not be too impressed with this strategy – ie just icnreasing your loans every year without an income comming in from the increase.

Terryw
Discover Home Loans
North Sydney
[email protected]